Investorial

‘The Intelligent Investor‘ is a highly recommended book for any investor of any investing style; especially value investing. It is my personal favorite investment literature. When the second richest man in the world, Warren Buffett - the only one on that distinguished list who made his fortune through stock investments, recommends a book to you, aren’t you the least bit curious why he did so?

Warren Buffett: “I read the first edition of this book in 1950, when I was nineteen. I thought then that it was by far the best book about investing ever written. I still think it is.”

The latest edition of ‘The Intelligent Investor’ has been revised by senior Money magazine writer and guest columnist for Time Magazine and CNN.com, Jason Zweig. Zweig brings a very balanced updated approach to reading the book since the original author, the father of value investing - Benjamin Graham, originally published the book in 1949.

For most of us, if you don’t want to buy the book, you can take a trip to the local bookstore, sit down and enjoy a coffee while scanning the literature. Or you can read the first 3 chapters for free courtesy of JasonZwieg.com. I recommend that you buy a copy for your book collection, since from time to time we all need a refresher course! (Canadians can buy from Amazon.ca here!) [via Wealth Junkie]

Email has replaced many forms of communication media, and is unscrupulously used by scammers and con artists to extend their reach to a global arena. It’s not just about simple identity thefts anymore. Those phishing emails seem pale in comparison to the many other scams perpetrated by others on the internet. At least, when it comes to identity theft, you did not participate much except that you mistook a well-disgusied website as an authentic one and gave away your passwords and personal information.

The Nigerian email scams are not new. They’ve been steadily becoming a popular menace for consumers since 2000 and perhaps before that too. I myself, know of a few persons in my circle that have almost fallen victim to the scam. The fortunate ending was that no money were ever exchanged and their folly were caught in time! Being a savvy internet surfer since the internet gained popularity in the early 1990s, I was glad that I helped one of these individuals wake up to the sobering truth.

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I’m glad someone else saw the light! After my latest blogs warning about recent legislations to cut federal dividend taxes and Income Trusts avoiding additional tax burdens. My stance was that deciding if you wanted to earn income through dividend-paying companies or Income Trusts is still very premature due to the political turmoil gripping the nation.

I share with you an article describing the instability and unpredictable nature of law changes. Even if dividend cuts do come to fruition (which it most likely should), I prophecize that we have not seen the last debates about Income Trusts taxation yet!

There are two other matters to consider if you’re swayed by the dividend tax cut, one of them being the fact that this measure has not yet been passed into law by a parliamentary vote. The Canada Revenue Agency will start applying the lower rate for dividends paid in 2006, but a federal election would prevent a vote. In that case, the party forming the next government would have to decide whether to follow through or eliminate the tax reduction. If it’s eliminated, then the old dividend tax rate would apply and the price of dividend stocks could fall.

This is a very technical article by long time Globe writer, Rob Carrick. Normal readers should concentrate on the paragraphs that do make sense to them in plain english. Now that Prime Minister Paul Martin has dissolved parliament and set a vote for January 23rd, it is inevitable for many to wonder what will the future government decide; in favour of investors or tax revenue?

GlobeAdvisor.com: ‘Trusts versus dividends’ by Rob Carrick [via Stingy Investor]

As soon as Ralph Goodale’s decision to not interfere with Income Trust taxation was official, the predictable masses started to valuate trust securites to higher worth on the stock exchanges. I see this as a ridiculous, irrational reaction to media attention. A long term investor would know better than to jump in and out, especially when the news could potentially turn out to be only a temporary stay of execution.

I guess it’s human nature to jump on bandwagons. But I wonder, do people believe good news more, or bad news more? Personally, I am more easily convinced by bad news in the financial world simply because most good news are either sales tactics or merely serve to promote an industry where the customer must be sold. So let’s get in a timely article by the Toronto Star warning about the stability of Income Trusts. Enjoy!

Editor’s Note: Do remember that this article only talks about business trust. It helps that it’s the trust type that I’m most familiar. I’ve also previously blogged that I feel too many businesses are converting to trusts that have no reason to utilize such a structure in the first place!

TheStar.com: ‘Income trust study raises red flags’ by James Daw [via Stingy Investor]

As the dust settles, Income trust investors are temporarily victorious over the federal government in the issue of Income Trust taxation. Turmoil has gripped the investment community ever since finance minister, Ralph Goodale, announced that he was re-examining the issue and suspended advance-tax rulings to companies that wanted to convert to an income trust structure.

Today, in a blatant pre-election move, Ralph Goodale succumbed to political and the financial community’s pressure, and announced that no taxes will be planned on trusts. Certainly, the pressures were more political in nature as the minority government prepares to be defeated in the House of Commons in the near future.

The finance minister, still looking for ways to level the playing field for corporations, cut dividend taxes - a move that has been much demanded by shareholders for a while. A winter election is inevitable and making the public happy with favourable tax policies is a survival tatic that must be employed by the Liberals.

My two cents? I am certainly in favour of (more…)

My posting frequency has slowed down a lot in the last few days for both Investorial and my personal blog VinceChan.net. I’m currently working on a project that has been occupying most of my waking hours. The fact that I’m posting this blog at 2:04 am is proof enough I hope!

Besides that, I feel a need to reach out to my fellow bloggers. I am implementing a new feature to accept story submissions. If you are enthusiastic about how financial information is presented, or if you saw some article/media that you would like me to comment, please use the new “Submit a story” link located just beneath my picture on the right side-bar.

I will start by moderating these submissions, and I will definitely include full credit and links to your sites if you wish. Perhaps we can even bring you on board as a blogger on this site!

So don’t all of you rush to submit stories now! But I hope to hear from you!

Continuing the bubble watch series on real estate, I just want to point out a recently published article by The Globe & Mail regarding the real-estate scene in the United States. The article does not single out any particular region but takes a national overview. The numbers mentioned in the article are significant and serve to remind everyone that housing prices are really getting out of hand! Considering the interest rate trends these days, it is becoming more than tempting to stay on the side-lines. Eventually, consumers will start thinking better of it. However, never underestimate the power of the American Dream - owning you own home!

Globe&Mail.com: ‘Fewer can buy a house’ by Roma Luciw